Vote to reject positive ranking reflects fear schools may not be able to pay future bills

San Diego 
The San Diego school board has once again raised concerns about its ability to meet its financial obligations.

Trustees on Tuesday approved a preliminary budget that includes annual spending plans through the 2013-14 school year. At the urging of trustee Richard Barrera, the board voted 4-1 to override the chief financial officer’s recommendation that called for the San Diego Unified School District to self-certify its budget plan with a positive rating.

With Shelia Jackson opposing, the board lowered the budget grade to “qualified,” a certification that means it’s not sure it can pay its bills in one of the three school budget years: the 2011-12, 2012-13 and 2013-14 school years.

Seven of the county’s 42 districts were among more than 100 statewide to adopt budgets with qualified certifications in the last round of preliminary budgets. A negative certification is assigned when a district will clearly be unable to meet its financial obligations.

This is the first time in recent memory that San Diego Unified has downgraded its budget status, an action that invites scrutiny from the County Office of Education. Last October, Superintendent Bill Kowba warned the public the district was on the brink of insolvency and then later recanted that assessment after San Diego Unified avoided devastating midyear state budget cuts.

CFO Ron Little said the district could have adopted its budget with a legitimate positive certification. However, he said the board’s downgrade is reasonable given the increasing uncertainties over education funding brought on by the state’s fiscal crisis.

Budget certifications are based on several factors, including student enrollment trends, cash flow, how much money has been set aside in reserve accounts, and whether realistic cuts have been approved to balance the budget.

To offset a projected $122 million deficit to next year’s $1.1 billion operating budget, the district authorized the elimination of more than 1,600 teaching positions and hundreds of other jobs. In a preliminary state-required plan to balance the 2013-14 budget, the district calls for more layoffs, school closures, deep program cuts and other cost-cutting measures that Barrera said is unreasonable and would hurt students.

Meanwhile, Barrera is hoping the teachers union will agree to concessions that would save jobs and keep class sizes from ballooning next year. He said his decision to push for the lower budget rating was about “facing reality” and has nothing to do with politics. Union officials have said they want to see real state funding numbers before considering concessions.

Districts must submit their budgets to the County Office of Education by Thursday. The county will approve or change the certifications. Districts with qualified certifications must submit a third interim budget based on April actuaries with projections through June 30. Barrera wants San Diego Unified to take that as an opportunity to redesign its 2013-14 budget and reconsider which of its offerings are most crucial to students. But Barrera was clear that the district is not inviting the county or state to balance its budget for the district.